President Joe Biden (AP Photo/Evan Vucci)
In an emergency appeal last week, President Joe Biden's administration asked the Supreme Court to lift a block on his massive Saving on a Valuable Education (SAVE) student plan, which a federal appeals court temporarily blocked in July, then again blocked on August 9.
The appeal asks to temporarily lift a lower court ruling that currently prevents President Biden from implementing his SAVE Plan, which would lower student loan payments for millions of borrowers and was set to begin July 1.
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"The U.S. Department of Justice filed an emergency application with the Supreme Court to vacate the Eighth Circuit Court of Appeals' injunction of the Saving on a Valuable Education (SAVE) Plan," said U.S. Secretary of Education Miguel Cardona in a statement. "This injunction, if allowed to stand, would harm borrowers who have dutifully repaid their loans for up to 25 years by denying forgiveness that has been available under law for three decades.
"We remain committed to supporting borrowers and fighting for the most affordable repayment options possible for millions of people across the country. Already, we've approved $169 billion in relief for nearly 4.8 million Americans entitled to relief under various programs, including teachers, veterans, and other public servants; students who were cheated by their colleges; borrowers with disabilities; and more. President Biden, Vice President Harris, and I are committed to fighting for college affordability for all."
Under the SAVE plan, borrowers who originally took out $12,000 or less in loans and have been in repayment for 10 years are eligible to have their remaining student loan debt canceled. More than 8 million borrowers are enrolled in the SAVE plan, and the Education Department was ready to cancel $5.5 billion of debt for 414,000 borrowers.
In June, two injunctions handed down by federal judges put the SAVE program on hold:
- In the Missouri ruling, District Judge John Ross of the Eastern District blocked the Education Department from carrying out " any further loan forgiveness for borrowers" under the SAVE program until he decides the full case. He agreed that the program illegally deprives state loan operators of revenue. SAVE would harm Missouri, he said, because it would reduce the fees that the Education Department pays to the Missouri Higher Education Assistance Agency, the same entity at the center of the Supreme Court's case over Biden's first student debt relief progra
- In the Kansas ruling, District Judge Daniel Crabtree blocked the Education Department from implementing a part of the SAVE program that would lower some borrower's monthly payments. However, he declined to block the entirety of the program, citing concerns about unwinding the parts of the program that have already been implement
Related: 130 Republican lawmakers demand Biden end 'reckless' student loan bailouts
Three GOP-states – South Carolina, Texas and Alaska – have also asked the Supreme Court to block President Biden's new SAVE student loan repayment program.
President Biden's SAVE plan was set in motion after the Supreme Court tossed out his plan to forgive student debt of more than 40 million people last year. The SAVE plan is an income-driven repayment plan that will cut borrower's monthly payments in half.
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Lynn Cavanaugh
Lynn Varacalli Cavanaugh is Senior Editor, Retirement at BenefitsPRO. Prior, she was editor-in-chief of the What's New in Benefits & Compensation newsletter. She has worked for major firms in the employee benefits space, Vanguard and Willis Towers Watson, as well as top media companies, including Condé Nast and American Media.
